Parkside Place: all 99 of Grosvenor Estate’s flats sold off-plan last year, many reportedly to overseas investors
students and another 1,500 homes for sale, plus 10,000 sq ft of research space. Phase one is likely to start late this year and includes 530 staff homes, 426 private homes to sell and 300 student beds (see p92). This development was cited by the
credit rating agency Moody’s when it gave Cambridge University its own triple-A rating at the end of 2012. The agency notes that the university has sufficient capital to fund much of the scheme itself but late last year launched a £350m, 40-year bond issue, with the proceeds used to fund building projects. This will “result in a modest leverage relative to peers,” according to the Moody’s report. If commercial residential investors
need any further encouragement, they could study the rapid success of McLaren Group’s Brunswick House. It opened last year close to Anglia Ruskin’s Cambridge campus; most of its 227 single-study bedrooms, built in clusters, and its 24 self-contained studios were purchased off-plan and all are now fully let. Bidwells’ Bentley says there are more
sales successes bubbling up – some 80% of units in phase two of Crest Nicholson’s 440-home Kaleidoscope scheme have been reserved, for example – but he warns that space within the city centre is now limited. Future developments are therefore
CAPITAL GROWTH COMPARISONS
Cambridge is one of the few UK locations outside prime central London with consistent capital appreciation in recent years, making it a target for international investment. These figures show performance compared with the Q3 2007 market peak.
12% COMPARED W/Q3 2007 ENGLAND AND WALES 8% 4% 0% -4% -8% -12% Source: Savills 23 February 2013 COMPARED W/Q3 2007 ALL-LONDON COMPARED W/Q3 2007 PRIME CAMBRIDGE
likely to be in the suburbs and, inevitably, will mostly be family houses and not flats, presenting a challenge to those seeking investors. “Three years ago the new-build ratio
was four apartments to one house. Now it’s one-to-one. Soon houses will outnumber apartments and we’ll have to keep the high level of international and investor interest when we focus on the suburbs,” says Bentley. Bentley says the city would be unwise
to rely for the majority of its high-spec residential sales on international markets, there will be a need to step up overseas marketing and shift attention on likely appreciation and rental yields from houses, as well as flats. The next two years will determine
Q4 2010 Q4 2011 Q4 2012
whether investor interest can be retained, but in the meantime the city’s residential good news continues. Its university is now fifth in the world in the prestigious Shanghai Jiao Tong rankings; a new Cambridge suburban railway station opens in 2015; the city’s commutability to the capital is now 45 minutes by train giving it the edge on hitherto more accessible Oxford. The potential for growth remains. And
Cambridge, star performer of eastern England, is likely to continue giving London a run for its money.